Recently, the cruise industry has experienced explosive growth. In 1981, for example, the worldwide cruise capacity consisted of 41,000 berths, and experienced a seventy percent (70%) load factor. By 1996, worldwide capacity rose to over 100,000 berths, and the load factor increased substantially to eighty seven percent (87%). The growth of the cruise industry is expected to continue into the next century, with approximately 10,000 to 15,000 berths added annually. With the announced addition of new ships and new cruise operators, there will be a substantial increase in worldwide cruise capacity. It is anticipated, however, that capacity may substantially outpace projected passenger volumes. Such excess capacity is expected to reduce load factors and put extraordinary pressures on pricing.
In order to deal with such pricing and inventory challenges, cruise operators and other travel-related sellers have developed sophisticated revenue management systems (RMSs) to optimize revenue. Generally, when a cruise berth is first added to a cruise operator's schedule, the cruise operator's revenue management system attempts to maximize revenue for the berth by establishing a plurality of fare classes and then allocating the number of cabins and price assigned to each fare class. The revenue management system will thereafter continue to monitor the actual demand within each fare class relative to forecasted demand, dynamically reevaluating the inventory allocation and pricing of each fare class for a given berth. In this manner, the cruise operators attempt to obtain maximum revenue from each sailing of a given ship.
While conventional revenue management systems employ sophisticated tools to anticipate future travel, forecasting errors invariably lead to unanticipated excess capacity. In addition, a cruise operator can utilize its revenue management system to forecast its anticipated excess capacity on a given berth associated with cabins that are predicted to be empty. Furthermore, unexpected external events, such as a price war or extreme weather conditions, can also affect a cruise operator's excess capacity. Thus, in an attempt to reduce such excess capacity, cruise operators periodically reevaluate the inventory allocation and pricing of each fare class for a given berth. A cruise operator cannot simply discount the published fares for such unsold cabins, however, without compromising its own underlying fare structure (i.e., without also reducing its prices for higher-fare travelers). Thus, there is currently no effective way for cruise operators to dispose of such excess capacity.
Currently, cruise operators, much like airlines, attempt to sell excess capacity utilizing consolidators, who traditionally sell cruise tickets at a discount. Since the terms of the relationship between the cruise operators and the consolidators are generally not berth specific and are typically defined months in advance, the sale of tickets through a consolidator does not provide a sufficiently dynamic mechanism for cruise operators to sell such excess capacity when actual demand fails to meet forecasted demand. Even assuming that the cruise operators could release the tickets for sale through the consolidators at the last minute, there is currently no effective way for the consolidators to announce the availability and price of such tickets to customers.
Cruise operators recognize that there is a large source of latent demand associated with leisure travelers who are willing to travel at a favorable price. There is currently no effective way, however, for a cruise operator to receive an offer from a customer for leisure travel at a particular price set by the customer, below the cruise operator's published fare. In particular, there is no effective way for the cruise operator to be confident that if the cruise operator accepts the customer's offer, the customer will book the ticket without using the information to ascertain the cruise operator's underlying level of price flexibility, which, if known to a cruise operator's competitors or customers, could dramatically impact the cruise operator's overall revenue structure.
As apparent from the above deficiencies with conventional systems for selling goods and services, such as cruise tickets, a need exists for a system that permits a cruise operator to sell excess capacity when actual demand fails to meet forecasted demand. A further need exists for a buyer-driven system that permits a cruise operator to sell tickets to leisure travelers at a price set by the customer, typically below the cruise operator's published fare. Yet another need exists for a system that permits sellers to stimulate sales of excess inventory, without compromising the seller's published price structure. Another need exists for a system that permits sellers to capture and process consumer demand for each selling price of a given item, such as a given fare class on each cruise berth.